TSO: NEC chip forecasts down (from WSJ):
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NEC Executive Says Chip Sales
Will Fall Because of Asian Crisis
By a WALL STREET JOURNAL Staff Reporter
TOKYO -- NEC Corp. expects its total
semiconductor sales to drop 1% to 2% as a result of
the Asian crisis, and it isn't sure when the situation will
improve, a senior NEC executive said.
NEC's sales of semiconductors are down across Asia,
where demand for chip-embedded consumer products is
down sharply. In South Korea, for instance, demand is
down to less than half, said Hajime Sasaki, head of the
Japanese company's semiconductor operations. Sales
also have been hurt by Japan's slumping economy.
"Frankly, it is difficult to know how long this will
continue," Mr. Sasaki said.
He added that NEC does believe it can offset weakness
in Asia by boosting sales in the robust U.S. and
European markets. At best, he says, that means NEC
will either leave its overall sales forecast for the year
ending March 31 unchanged or issue "a minor
modification."
Still, there is a silver lining for NEC: Its Korean
memory-chip competitors have also been battered by
the region's economic crisis. The won's weakness may
initially allow Korean manufacturers to make higher
profits on export sales, Mr. Sasaki said. But over time,
these companies are likely to face trouble purchasing
imported semiconductor equipment because of their
higher cost, and in raising money for the big investments
necessary to stay on top in the chip race, he said.
"Korean companies will lose competitiveness in the
semiconductor market, maybe by 1999," Mr. Sasaki
predicted.
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